SHANGHAI, Mar. 12 (SMM) – LME lead overnight started at USD 1,813/mt and then hovered around USD 1,815/mt in the Asian trading session. During European and US trading hours, the price of the soft metal fell to as low as USD 1,796/mt and ended down USD 8/mt at USD 1,804/mt. Trading volumes for three-month lead on the London Metal Exchange gained 707 lots to 3,158 lots, while positions shed 851 to 125,371. LME lead inventories decreased 825 mt to 212,500 mt on Wednesday.

Lead for May delivery on the Shanghai Futures Exchange, the most active contract, initially fluctuated between RMB 12,220-12,280/mt and finished up RMB 25/mt at RMB 12,235/mt in Wednesday’s night session. Trading volumes for the SHFE 1505 lead contract totaled only 452 lots.

The National Bureau of Statistics reported Wednesday that China’s industrial added value grew 6.8% in the first two months, down 1.1 percentage points from the same period last year. Fixed asset investment growth hit a new 13-year low. Fixed asset investment through February increased 13.9%, down 1.8 percentage points. During the same period, retail sales of consumer goods rose 10.7%, down 1.2 percentage points. The economic slowdown is largely due to sluggish domestic demand. The Chinese government needs to unveil more monetary policies to stimulate the economy.

The US dollar index surged to a 11.5-year high of 99.985 on Wednesday, exerting considerable downward pressure on base metals prices. The euro, however, tumbled to a refreshed 12-year low versus the dollar.

European Central Bank President Mario Draghi projected that the central bank’s quantitative easing will enlarge its balance sheet and in turn help push up inflation. Yields on ten year government bonds in many euro zone countries slipped to record lows after the launch of QE, triggering broad selling on the euro.

James Bullard, St. Louis Fed Chairman, stated that it is too late for the US Federal Reserve to tighten its monetary policy and not appropriate to keep interest rates close to zero against current economic conditions.

US stocks continued to fall on Wednesday. Gold slipped 0.58%, while crude dropped 0.25%. LME base metals closed lower again.

LME lead is expected to hover between USD 1,785-1,815/mt, while the most active SHFE 1505 lead contract is set to move between RMB 12,200-12,300/mt on Thursday. Spot lead in China should trade between RMB 12,250-12,400/mt.